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Have you ever thought about buying property in Bali and felt overwhelmed?
You’re not alone.
The idea of owning a retirement spot or generating passive income in Bali is exciting. But the process of buying property abroad can feel confusing and risky.
But don’t worry; we’re here to help.
Through this article, we simplify things and show you the 6 most important things to do — and 6 mistakes to avoid — so you can move forward confidently and make your investment in Bali a success.
Let’s dive in!
✅ DOs
#1: Understand How Ownership Works for Foreigners
Before anything else, you need to know how foreigners can (and cannot) own property in Bali.
There are two common options: Leasehold and PT PMA ownership.
- Leasehold (Hak Sewa)
You lease land or a villa for a set term, usually 25 to 30 years, with options to extend. You can live in it, rent it out, or improve it just like an owner during your lease.
- PT PMA (Foreign-Owned Company)
Foreigners can set up a legal company in Indonesia called a PT PMA. This allows you to control land through a long-term right to build (Hak Guna Bangunan) under Indonesian law. This is the only legal way for foreigners to “own” land in Bali through a company.
Choosing the right setup depends on your budget, goals, and timeline. A local expert can guide you through what fits best.
#2: Do Thorough Due Diligence
When buying property in Bali, it’s super important to look into every detail before you decide.
This helps you avoid any surprises later on. Here’s what you need to do:
- Verify ownership: Make sure the seller legally owns the land or villa. Their name should match the certificate.
- Check zoning and permits: Is the property in a tourism zone? Is it allowed for residential or rental use? Does it have an IMB (building permit) or PBG (new version of IMB)?
- Confirm it’s debt-free: Make sure there are no unpaid loans or claims on the property.
Skipping due diligence could cost you more later, or worse, leave you with a property you can’t legally use. Make sure to work with the right team that helps you do all the due diligence.
#3: Plan for Upkeep Costs
Many buyers focus on the purchase price, but forget the day-to-day costs of owning a villa.
Pools need cleaning. Gardens need care. Air conditioners need servicing. And things break.
Typical upkeep for a villa in Bali can range from $150 to $500 per month, depending on the size and services. Plan ahead so your income or return stays realistic, and you’re not caught off guard.
Also read: The Cost of Buying Real Estate in Bali.
#4: Have a Clear Exit Strategy
Think of an exit strategy like planning a trip.
Before you start your journey, you know where you want to end up and how you will get there.
The same goes for real estate investing in Bali. Your exit strategy is your plan for what you’ll do with your property in the future.
Will you sell the villa later?
Transfer the lease? Extend it?
How many years will remain on the lease when you’re ready to exit?
Properties with at least 20 years remaining on lease are easier to resell. So if you’re buying something with only 10 years left, factor in the cost and terms of an extension upfront.
Your exit strategy helps you make smarter decisions today and protects your long-term return.
To learn more about how many leases remain for a better exit from your Bali investment, check out our complete guide here.
#5: Know Your Tax Responsibilities
Foreign buyers in Bali are subject to taxes before and after purchase.
Before You Buy:
- Due Diligence / Legal Fee: For checking permits, land ownership, and contracts.
- Notary Fee: Around 1% of the property value to register the sale.
After You Buy:
- PBB (Land and Building Tax): 0.1%–0.3% of the assessed value.
- Income Tax on Rentals: 20% for non-residents.
- Capital Gains Tax: 5% when you sell the property.
If you own property through a PT PMA, your tax setup may differ, so work with a tax advisor familiar with foreign ownership.
Note: For exact numbers and exemptions, a local tax advisor is very helpful. They can ensure you follow the latest rules and help you with any deductions.
#6: Know the Visa Rules
You can buy leasehold property in Bali without a visa, but having the right visa can make things easier.
Visas like the KITAS (temporary stay permit) help with staying longer, opening bank accounts, and handling legal paperwork.
You don’t need a visa to invest, but it may open more doors and provide flexibility later.
❌ DON’Ts
#1: Don’t Rely on Rental Guarantees
Be cautious if someone promises you guaranteed rental income.
These offers are often inflated or tied to strict conditions.
Instead, research actual rental prices on platforms like Airbnb, and talk to local property managers about seasonal trends.
Always check everything carefully before buying a property based on rental guarantees.
#2: Don’t Skip Legal Advice
Buying property in Bali has a lot of legal steps, especially for someone from another country.
Even if the villa looks perfect, don’t try to handle the legal process alone.
Hire a trusted legal advisor or a property agent who understands the rules for foreign ownership. They’ll help you avoid hidden issues and make sure your investment is protected.
#3: Don’t Ignore Property Management
If you won’t be living in Bali or don’t want to spend all your time taking care of your property, you should consider hiring a company to do it for you.
A good property manager can:
- Handle guest check-ins and bookings
- Coordinate cleaning, repairs, and maintenance
- Maximize your rental income
It’s worth the cost if you want peace of mind and consistent returns.
#4: Don’t Ignore the Market
The real estate market can change significantly. What’s popular now might not be in a few years.
So, it’s important to examine what’s happening now, what has happened in the past, and what might happen in the future.
If you only focus on trendy spots like Canggu or Uluwatu, you might miss emerging areas like Kedungu, Tumbak Bayuh, or Seseh.
Follow trends, but think long-term. Location matters; so does timing.
#5: Don’t Forget About Your Exit
Many foreign investors get stuck with properties they can’t sell later, usually because the lease is too short or the location loses its appeal.
As we mentioned how having an exit strategy is important; make sure you know how and when you’ll exit, and how easy it will be for someone else to buy or extend the lease after you.
#6: Don’t Cut Corners or Use Nominees
When buying property in Bali as a foreign investor, it is crucial not to cut corners during the property acquisition process.
Never skip legal steps to “get the deal done faster.” Especially don’t use a local nominee (someone who holds the property in their name on your behalf).
It’s risky and not legally protected for foreigners. It might seem like a shortcut, but it can lead to big losses if anything goes wrong.
Use the right legal structure and professionals. That’s how you protect your investment.
How to Get Started the Right Way
Buying property in a foreign country is a big step, and it’s completely normal to feel unsure at first.
What matters most is knowing the basics:
- Understand what you can legally own as a foreigner
- Do thorough due diligence
- Plan for ongoing costs and future resale
- Get the right legal advice
- Avoid shortcuts that could cost you later
Whether you’re looking for a beachfront villa or a long-term investment, the key is to take it step by step and stay informed.
If you’re still unsure and want to talk with an expert about investing in Bali, schedule your FREE 10-minute no-obligation session below with our team.
